The Baht At 6-year High Against The Us Dollar

[lannarebirth]

The Baht may seem strong against the dollar, but it's basically that the dollar is weak. The Baht is well off highs V the GBP and EUR. The dollar has corrected a lot over the last couple of years, but personally I don't think it has finished yet. I'm from the UK, but not biased, as I get paid in US$. I can still see the xrate going above $2/£1 within the not too distant future, which would probably mean a similar decline V the THB. Is it even possible for the BOT to intervene to a significant extant anymore after what happened last time?

I'm no expert, just a barstool economist who still feels the $ is overvalued, please feel free to comment, criticise, or correct me.

I think you very well could be right, but I just shorted the GBP tonight anyway. Let's see what happens.

[konangrit]

"The Baht is well off highs V the GBP and EUR"

------

it all depends on the time frame one is referring to.

I get your point, but this thread is about the Baht being at record 6/7 year highs V the Dollar, so logically (I realise you're not a Vulcan) that would be the time frame. The baht is also well off all time highs V the GBP and EUR, so I'm not selectively choosing certain dates to suit my argument as many here do, and is why I understand your point.

Edited October 30, 2006 by konangrit

[Naam]

"I realise you're not a Vulcan"

[dclaryjr]

From my perspective the US dollar has definitely dropped.

It's definitely dropped from my perspective. The amount of the wire transfer I'm doing every month to pay for the house I built is going UP!

[Old Man River]

"IS THE USA TOO BIG TO FAIL? Will the world continue to prop up America, even if the emperor is naked?"

most probably the answer for both of your questions is "yes". countries who having continuously a big trade surplus with the Greatest Nation on Earth and therefore holding trillions of dollars reserves are riding a tiger. it's just too dangerous for them to get off!

no matter what experts, gurus and @n@lysts are propagating.

Well put.

[Jai Dee]

Thai central bank again intervenes to soften baht

BANGKOK (AFP) - Bank of Thailand (BoT) governor Tarisa Watanagase said Monday the BoT had again intervened in the foreign exchange market to slow the baht's sharp rise against the dollar.

"The Bank of Thailand wants to reaffirm that we will intervene only when needed, and at the moment the baht has stabilised," Tarisa told reporters.

The bank also intervened on Friday, but Tarisa again refused to say how much the bank had spent to soften the currency, which is trading near a seven-year high.

She said capital inflows from the United States, the main factor behind the baht's rise, has slowed down.

But she said the bank will closely monitor the inflows due to fears of speculation.

"Most of the capital inflows are short-term investments in the stock and bond markets, in which case the investment is quickly transfered, which is different from foreign direct investment, which is more long term," she said.

She said the other reason for the baht's appreciation was expectations that the US economy will weaken in the third quarter, amid lower confidence in the US economy due to a softening property market.

However she insisted that a strong baht would not hurt Thai exporters because the central bank has sent signals since early in the year that the Thai currency would appreciate.

The bank's assistant governor, Atchana Waiquamdee, said gains in the baht would track the rise of other regional currencies -- assuming the Chinese yuan also strengthens.

"Regional currencies including the yen, the yuan, the Singapore dollar, the Philippine peso, the rupiah and the won are expected to strengthen further, mainly due to the yuan's strengthening," she said.

Kasikorn Research Center said in its latest report Monday that the baht has gained 11.6 percent against the dollar this year, leading regional currencies.

Kasikorn projected that the baht will continue to gain for the rest of this year and next year due to an improving political climate after the September 19 coup.

Bangkok Bank dealers said the baht opened in Bangkok trading early Monday at 36.72-77, after hitting 36.65 in New York over the weekend.

The Thai baht closed Monday at 36.78-80 baht to one dollar compared to Friday's close of 36.87-89.

Source: The Manager - 31 October 2006

[Jai Dee]

Baht currency has depreciated since morning

The baht value has depreciated in accordance with the Japanese yen at the money market since today morning (Oct 31).

A financial executive from Bank Thai said that the baht currency in the money market this morning opened at around 36.82 to 36.85 baht per one US dollar, and the value is weaker than yesterday’s closing price at about 36.76 to 36.79 baht per one US dollar. The value of Thai baht has descended after Japan declared the unemployment rate of September, in which the rate increased from 0.1% in August 4.2%. As a result, the currencies in Japan and other Asian countries have fallen. In addition, the figure in the household sector in Japan has also decreased for nine consecutive months.

The Bank Thai financial executive also considered that the Bank of Thailand (BOT) may intervene with the value of Thai baht after it has strengthened continually. Today, the baht currency is anticipated to stand between 36.70 and 36.85 baht per dollar since people are waiting for the meeting results of the Bank of Japan (BOJ). It is predicted that the BOJ will maintain the interest rate at 0.25%, but the main issue concerns the timing of the bank to raise its interest rate.

Source: Thai National News Bureau Public Relations Department - 31 October 2006

[Naam]

USD/THB real time quote at 16.58 = 36,70

[cwilliam]

imho The baht will continue to gradually stenghten against euro . dollar etc over the comming years as the economies in the west decline , especially the usa , and as the eastern economies strenghten .

The U.S. wants a weak dollar the countries with a strong currency will eventually decline.Stronger doesn't mean better.

[konangrit]

The Baht may seem strong against the dollar, but it's basically that the dollar is weak. The Baht is well off highs V the GBP and EUR. The dollar has corrected a lot over the last couple of years, but personally I don't think it has finished yet. I'm from the UK, but not biased, as I get paid in US$. I can still see the xrate going above $2/£1 within the not too distant future, which would probably mean a similar decline V the THB.

Oh dear, now at $1.95.4/£1, economists on the news predicting $2/£1 by the end of the year. Really don't want to pay myself this week at that rate, but may regret that next week if the dollar continues to slide. Also have a significant sum in USD, but it's not liquid so will just have to grin and bear it. I feel that this is in for the long haul.

Edited November 28, 2006 by konangrit

[bkkandrew]

Dollar crashing today. Latest 36.13...

Source:

http://newsvote.bbc.co.uk/1/shared/fds/hi/...78/intraday.stm

[bkkandrew]

Same source, actually went below 36, admittedly only to 35.99, but anyone with some $$$s should change them up sometime soon IMHO...

[Jai Dee]

Thai baht rapid rise not justified - central bank

BANGKOK, Nov 29 (Reuters) - The baht's rapid rise is not justified by Thailand's economic fundamentals because investors overestimated returns, Band of Thailand Governor Tarisa Watanagase said on Wednesday.

The central bank had acted to slow the baht's rise and would keep monitoring the currency, Tarisa told Reuters as the baht hit its highest in nearly 8 years.

At 0634 GMT, the baht, the fastest riser among Asian currencies this year, was quoted at around 36.05 baht per dollar.

Source: Reuters - 29 November 2006

[jing jing]

Whenever the Thai central bank intervenes it has a temporary effect of bringing the baht down slightly, then it continues to rise unabated to wherever the market takes it. Why do they even bother?

[cclub75]

Whenever the Thai central bank intervenes it has a temporary effect of bringing the baht down slightly, then it continues to rise unabated to wherever the market takes it. Why do they even bother?

Can you imagine the guys from a Central Bank, and especially the thai Central Bank saying that they are totally powerless ?

They are nice and sweet spectators. They can only give something that costs nothing : speeches.

Or they could be really serious, and act swiftly on interest rates for instance. Or burning their 60 billions USD reserves to support the... USD ! That would be really serious. But that's another -unlikekly- deal... Ah ah ah.

So right now : they are talking. But nobody seem to care....

[realthaideal]

So I bought a ticket home for the holidays and to straighten out my VISA b4 the mad rush. I scored an ok pirce on a RT Ticket @ 30,000 Baht. When I came here 3 yrs ago the math was easy, and the dollar was strong -pretty much holding at 40 B /$. So my ticket feels like it's costing me $750......but the reality when I look on http://www.xe.com/ucc/ - the Universal currency converter, makes me sad. My ticket's actually costing me $831. Waaaaaa ! Do you know how many Singhas that's costing me ? Or more like a night or two or three of eating seafood with the $80 diff.

I get paid from the US too, so my income in $$ is shrinking too. That's all. I got it out. I feel better. I know many others are in the same boat.

[PeaceBlondie]

Okay, so I could maybe take out 50,000 baht this week, 80,000 baht next week, converting it from US $. What do you folks think - do it now, or do it later, like later in December?

[helitool]

Our economy here in the states is headed south. China is slowly selling $ and buying Baht (along with other currencies). The Fed would need to raise intrest rates to stimulate intrest in the dollar. If they do that the economy will get worse. Most here are predicting that they will lower rates by first part of next year. That will not help the value of the dollar. Go to www.whatreallyhappened.com and read some of the articles in the economy section.

There are currently only about 10 million manufacturing jobs left in the US. Manufacturing is the only thing that produces real value, most other methods amount to gaming the system.

[bkkandrew]

Okay, so I could maybe take out 50,000 baht this week, 80,000 baht next week, converting it from US $. What do you folks think - do it now, or do it later, like later in December?

Well..

USD tested 36.0 THB today, went through and came back slightly.. The next test, or the next etc.. i.e. when auto-sellers/buyers of currency (that set a target price of purchase/sale and wait until it is achieved) are satisfied, the "test" can then succeed and the currency move further in the direction it is heading.

That suggests "DO IT NOW!!!"

On the other hand, if the US enconomy recovers in terms of trade and/or balance of payments deficit, or increases interest rates significantly, then you could be better off waiting...

[DFCarlson]

Okay, so I could maybe take out 50,000 baht this week, 80,000 baht next week, converting it from US $. What do you folks think - do it now, or do it later, like later in December?

Well..

USD tested 36.0 THB today, went through and came back slightly.. The next test, or the next etc.. i.e. when auto-sellers/buyers of currency (that set a target price of purchase/sale and wait until it is achieved) are satisfied, the "test" can then succeed and the currency move further in the direction it is heading.

That suggests "DO IT NOW!!!"

On the other hand, if the US enconomy recovers in terms of trade and/or balance of payments deficit, or increases interest rates significantly, then you could be better off waiting...

Ah, that's what I like, a really strong bit of advice... I am here long term on a retirement visa, and I am postponing as much as possible converting US dollars to baht.

I have to buy some baht to pay the bills, but that's it for now. Who can predict? But I can't believe that the baht will strengthen (or the dollar will weaken) without limit. It's really a crap shoot but for now I'll keep my dollars and watch for an improvement. Next summer maybe?

[Old Man River]

Whenever the Thai central bank intervenes it has a temporary effect of bringing the baht down slightly, then it continues to rise unabated to wherever the market takes it. Why do they even bother?

Can you imagine the guys from a Central Bank, and especially the thai Central Bank saying that they are totally powerless ?

They are nice and sweet spectators. They can only give something that costs nothing : speeches.

Or they could be really serious, and act swiftly on interest rates for instance. Or burning their 60 billions USD reserves to support the... USD ! That would be really serious. But that's another -unlikekly- deal... Ah ah ah.

So right now : they are talking. But nobody seem to care....

This is a managed float. All the BOT can do is tweak (fine tune). The BOT can cut its policy rate, but Thai bankers have said they won't follow because loan demand is still strong. In 1997 the central bank used its reserves to support the THB and bankrupted the country. That was when the country's USD/THB exchange rate was fixed. Now, supply and demand dictates the USD/THB exchange, as it should.

By the way, the Central Bank Governor is nice.

[dog412]

unfortunately, so many of us have to rely on the short term "qualities" of investing. long term, the U.S. is very favorably positioned to be in a very strong position of growth. large country, arable, low population density, extreme natural diversity, and rule of law included. whether you agree with U.S. politics or not, it does represent the most diverse group of individuals ever assembled on this planet. even conservative investing in the previous years SHOULD have made money in the stock market, enough to be unconcerned with the recent gains in the Thai Baht.

[usatrader]

SOARING CURRENCY

Speculators behind baht surge: BOT

Non-residents have been buying baht bonds to lay hands on Thai currency

(Excerpts)

Foreign speculators have found new ways of financing the speculation, BOT assistant governor Suchada Kirakul said, adding that the unit has strengthened too quickly - to a level not justified by economic fundamentals.

The BOT has learnt that a number of non-resident investors have bought into baht bonds from Thai banks with the agreement to sell back the bonds in a certain period. This is equivalent to the borrowing of baht from local banks, and waiting for the right time to convert the currency into US dollars when the greenback slides further. Once the first sell-back agreement expires, they strike another revolving contract

The new financing scheme by speculators was introduced at a time when domestic interest rates were on a downward trend. This leads to a decline in long-term bond yield curves and boosts trading activity in baht bonds.

Exporters have cried foul over the irregular baht movement.

The central bank estimates that every percentage-point increase in the value of the baht against the dollar will slash Thailand's growth in gross domestic product by 0.3 of a percentage point. This would widen the current-account deficit, as export income would be hit as a result. Wider current-account deficits in turn would eventually weaken the baht

Circa; 1997...?

Many exporters expect the central bank to respond to the baht's strength by cutting interest rates, but the main focus of the central bank's interest-rate policy is price stability. It's not about the interest-rate spread," said Standard Chartered's Usara Wilaipich.

"Besides, a rate cut would have only a brief effect on the baht, which has been driven up by inflows into Thai stocks and bonds."

Anoma Srisukkasem,

Somruedi Banchongduang

The Nation

http://www.nationmultimedia.com/2006/12/01...ss_30020410.php

Yank fixed income retiree's and teachers feeling the pain perhaps...??

[cclub75]

Non-residents have been buying baht bonds to lay hands on Thai currency

Ah ! I feel relieved : the bad foreign speculators are back ! Let's the party begin.

BOT should go a litte bit further and try to identify where they're coming from.

[Naam]

Non-residents have been buying baht bonds to lay hands on Thai currency

*****

i fail to see the logic in this statement. why should they buy domestic Baht bonds when they can buy any amount of cash Baht offshore without restrictions? moreover, offshore cash Baht deposits offer the same yield like domestic bonds but are (unlike the paid interest on bonds) free of any income tax.

[PeaceBlondie]

Farang teachers won't feel any pain, as they're on the local economy. Of course, American retirees feel lots of pain. Ouch.

[PREM-R]

Last night, (Thursday), the Newsline English language programme had a section about the rise of the baht. The commentator suggested that the Bank of Thailand was already warning Thai exporters to expect an exchange rate of between 32-33 baht to the dollar within the next 5 years.

[Old Man River]

Last night, (Thursday), the Newsline English language programme had a section about the rise of the baht. The commentator suggested that the Bank of Thailand was already warning Thai exporters to expect an exchange rate of between 32-33 baht to the dollar within the next 5 years.

Did they say the next 5 months or 5 years? A lot can happen in 5 years and the value of the THB in 5 years could be anywhere.

[astral]

And the US dollar is even lower to day. $1.96 to the UKP.

[DFCarlson]

Last night, (Thursday), the Newsline English language programme had a section about the rise of the baht. The commentator suggested that the Bank of Thailand was already warning Thai exporters to expect an exchange rate of between 32-33 baht to the dollar within the next 5 years.

Did they say the next 5 months or 5 years? A lot can happen in 5 years and the value of the THB in 5 years could be anywhere.

Check it out! At the rate it's going it'll be 5 WEEKS, not months or years.